Is Now the Right Time to File for Consumer Bankruptcy?

When you are struggling to pay your bills and your debts are piling up, you may be wondering if now is the right time for you to file for consumer bankruptcy. There are many different myths and misconceptions concerning the bankruptcy process. As such, you may be concerned about filing and wondering if you should hold out for as long as possible. In most situations where personal bankruptcy is most likely inevitable, waiting to file for bankruptcy can be more harmful in the long run. However, in some cases, you may want to wait to file for bankruptcy based on your circumstances. Whenever you are considering bankruptcy, you should seek advice from an Oak Park consumer bankruptcy attorney. In the meantime, ask yourself the following questions to determine whether it could be the right time to begin the bankruptcy process with assistance from an experienced attorney.

Do You Qualify for Consumer Bankruptcy?

The first question you will want to consider is whether you currently qualify under the U.S. Bankruptcy Code for the kind of bankruptcy for which you want to file. If you want to file for Chapter 7 bankruptcy (a liquidation bankruptcy in which non-exempt assets will be liquidated and eligible debts can be discharged within several months), you will usually need to pass the “means test.” Passing the means test involves showing that your assets and income are sufficiently limited for a liquidation bankruptcy to make sense given your circumstances. If you want to file for Chapter 13 bankruptcy (a reorganization bankruptcy that can allow you to keep property associated with secured debt and get caught up on payments to creditors), you will need to show that you earn a regular paycheck and will be able to meet the terms of a Chapter 13 repayment plan.

Do You Need to Stop a Foreclosure?

If you are facing foreclosure and are considering Chapter 13 bankruptcy, now is likely the right time to file. With a Chapter 13 bankruptcy filing, you can stop a foreclosure and catch up on your mortgage payments. If foreclosure is the primary reason you are planning to file for bankruptcy, you should work with an attorney to ensure that you are eligible for reorganization bankruptcy.

Can You Exempt Important Assets?

If you are planning to file for Chapter 7 bankruptcy, are your most important assets exempt? Illinois law allows for a wide range of assets to be exempted in a bankruptcy case, and you should determine which of your assets are likely to be exempt from liquidation before filing for bankruptcy.

Do You Need to Take on Additional Debt Soon?

If you know that you will need to take on additional debt very soon, you may want to consider waiting to file for bankruptcy. Debt incurred close to your bankruptcy filing will not be eligible for discharge, and in some cases, incurring that additional debt could appear fraudulent. Before you file for bankruptcy or take on any additional debt, you should discuss your situation with a bankruptcy attorney.

Contact an Oak Park Bankruptcy Attorney

Anyone who is considering consumer bankruptcy should seek advice as soon as possible from one of our experienced Oak Park consumer bankruptcy attorneys. The bankruptcy process is extremely complicated, and you will want to have a dedicated lawyer on your side from the beginning. Our firm can evaluate your circumstances for you today and help you to determine whether bankruptcy is appropriate for you. Contact the Emerson Law Firm for more information about how we can help you with questions about personal bankruptcy in Illinois.


See Related Blog Posts:

What Property Can I Keep if I File for Chapter 7 Bankruptcy?

When Should a Consumer File for Chapter 11 Bankruptcy?

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